McCain To Elderly: Drop Dead (part 3)

Aside from John McCain's criticism of the basic structure of Social Security, what about the Senator's charge that the program is in "crisis," a key Repub talking point? According to ABC's Jake Tapper on his blog, Brian Rogers of the McCain campaign rationalized McCain's remark as

....the disgrace is our failure to fix the long-run imbalance in Social Security -- a failure of leadership evidenced by our willingness to kick to problem to the next generation of leaders. He’s also describing the looming and increasing demographic pressures confronting the Social Security system and Washington’s utter failure to address it.

This is one of the candidate's enduring, if destructive, themes. In an April, 2007 speech in Memphis, helpfully posted on his website, the presumptive Repub presidential nominee blustered

I'll fight to save the future of Social Security and Medicare. I won't leave office without doing everything I can to fix the fiscal problem that, more than any other, threatens our future prosperity and power. No problem is in more need of honesty than the looming insolvency of our entitlement programs. No government program is the object of more political posturing and spin than Social Security and Medicare. Americans have the right to know the truth, no matter how bad it is. So here's a little straight talk: the current Social Security system is unsustainable. Period. A half century ago, sixteen American workers supported every retiree. Today, it's just three. Soon, it will be only two. If we don't make some tough choices, Social Security and Medicare either won't be there for our children and grandchildren or we will have had to raise taxes so dramatically to support them that we will have crushed the prosperity of average Americans.

To summarize: McCain believes "the current Social Security system is unsustainable."

This is how the current system is "unsustainable" (from the Center on Budget and Policy Priorities report "What The 2008 Trustees’ Report Shows About Social Security"):

- In 2017, benefit payments will begin to exceed Social Security’s tax revenues. At this point, Social Security will start using some of the interest it earns on its trust fund bonds to pay benefits. But in 2017, the trust fund will have $4.5 trillion in assets and these assets will increase by another $1 trillion over the following nine years.

- The balances in the trust fund are projected to peak in 2026. After that date, Social Security will start redeeming the bonds in the trust fund to raise the additional funds needed to pay full benefits. The combination of tax revenues, interest earnings, and proceeds from redeeming Treasury bonds will be sufficient for Social Security to pay full benefits for 14 more years after 2026.

- The bonds (and thus the Trust Fund) will be exhausted in 2041. After that, the trust fund will continue to receive annual revenues from payroll taxes and from the partial taxation of the Social Security benefits that higher-income beneficiaries receive. That revenue will be sufficient to pay 78 percent of promised benefits, falling gradually to 75 percent of benefits in 2082.

To summarize the projections from the annual report of the Social Security Board of Trustees in 2008: Social Security revenues exceed Social Security costs until 2017. Balances in the trust fund will peak in 2026. Full benefits can be paid until 2041 and 75 percent of benefits in 2082- 74 years from now.

This is no crisis. It is a Republican myth.